Credit score is a three digit number which is used by banks and NBFCs to check how likely you are to pay back borrowed money. In other words, credit score determines your creditworthiness as a borrower. Your credit score can range anywhere between 300 - 900, and anything above the score of 720 is considered as a good credit score.

Credit score is an important factor in your financial life as it determines various factors for you. It also serves as a benchmark for lenders to determine whether they should give you a loan or not. And the rule of thumb is simple - the higher your score the higher your chances of getting a loan (with a lower interest rate) and/or Credit Card (with higher credit limit).

One can conclude that to get a better rate of interest for your next business, home, educational loan, a high credit score plays an important role.

But how can one increase their score is the big question.

Well here are some tips which you should follow to get a good credit score -

1. Make as many purchases/business expenses as possible using your Credit Card
   To make your Credit Card get recorded by the bureau to improve/build your credit score, the first thing is to use your card regularly. So whether it is a big purchase or your everyday spends to order food, travel or your business related expenses etc - remember to pay your bills with Credit Cards
2. Ensure you don't use 100% of your credit limit
   While you should use your card to make maximum payments, do not spend 100% of your credit limit, a good credit utilization ratio is considered to be 30%. If you spend 100% then Banks see you as a “credit hungry” customer and will be careful in the future if you ever apply for a loan or another Credit Card.
3. Pay your Credit Card bills regularly At the time of applying for a loan, lenders are extremely interested in how reliable you are in paying your bills and they make their decision based on your past performance. The logic is simple: if your history shows you have a tendency to pay bills on time, the chances of you paying your future dues on time are higher.

And Last but not the least,

Don't apply for too much credit – each application invites a hard enquiry, and that could hurt your Credit Score. Also, don't worry if you have an error in your report, you can always get it rectified provided you spot it at the right time

Conclusion Building or improving your credit score takes time, and there are no shortcuts for it. However, a secured Credit Card is the easiest way to speed up the process of building your credit score and taking it high!

The coolest and fastest way to improve your credit score is by getting early access to BharatNXT. BharatNXT app allows you to pay Bills with Credit Cards